Study On Legal Regulation Of Profit Distribution Of Limited Liability Company

Shareholders invest in a company with a reasonable expectation that they will receive profit in return for their assets.There is a free stock circulation market in listed companies,in which the companies' operating conditions and profitability would be quickly and accurately reflected by the stock price.If the managers fail to make an effective profit distribution policy that conforms to the minority shareholders'interest,the impaired shareholders can "voting-by-foot" and obtain the corresponding return on investment.However,there is no market for free circulation of equity in limited liability companies.It is difficult to determine the price of equity transfer,which is also the main reason for the inefficiency of equity transfer When there is profit available for distribution in a limited company,and the maj or shareholders and the board of directors under their control do not make a resolution on the distribution of profit or make a resolution not to distribute or distribute less profit,how to protect the expectation of the minority shareholders to obtain profit becomes the key to resolving disputes over the profit distribution of limited liability companies.Therefore,this paper discussed and analyzed from the following four aspects to study on legal regulation of profit distribution of limited liability company.The Company Law and its judicial interpretation stipulate that only when the company makes an effective resolution of the shareholders' meeting on profit distribution,shareholders are entitled to appeal to the company for profit distribution.Otherwise,shareholders are required to prove that the abuse of shareholder's rights causes the company not to distribute profit and causes damage to shareholders.However,such exceptions are not clear in theoretical circles and judicial practice.Courts are reluctant to interfere in the internal governance of companies because of the principle of corporate autonomy,so it is difficult to meet the demand of minority shareholders.At the same time,the courts' judgment on such cases is not uniform,and the phenomenon of“different judgments in similar cases" is not conductive to the parties' prediction of the outcome of the litigation,resulting in judicial uncertainty and unpredictability.The first part took a typological study on the profit distribution disputes in limited liability companies,defined such disputes that might occur practically and summarized relevant matters,including the focus of disputes,the results and reasons of courts judgment,the determination of the amount of profit distribution,the distribution of burden of proof,the exceptions identified by the court,whether the court examined the contents of the resolution of the shareholders' meeting and so on,in order to find out the trend and reasons of the courts' judgment on such disputes and the boundaries of judicial intervention in such disputes.In addition,on the basis of sorting out the cases,this part putted forward the problems existing in such disputes as the foundation of the subsequent research on the relief measures.The second part of this paper researched on the necessity and theoretical basis of protecting the right of claim for profit distribution of limited liability company.This part demonstrated the necessity of protection from two aspects:the heterogeneity of shareholders and the frustration of the existing relief system,and discussed the legal basis of protection from tree aspects:the games between judicial intervention and the principle of corporate autonomy,business judgment rule and reasonable expectation.The third part discussed the legal system and judicial practice of profit distribution disputes in the United States,Britain,France,Germany and Japan,and analyzed the specific situation of the application of such systems and whether they can be "landed" in China to provide reference for the improvement of the following recommendations.The fourth part putted up with the suggestions as to improve relevant relief measures to resolve the problem of profit distribution disputes based on the previous three parts.First,in order to reduce such disputes,shareholders should make prior agreements as far as possible.Second,introducing the principle of reasonable expectation in our country.Third,in order to prevent shareholders from abusing the right of action,the shareholders are required to "exhaust internal remedies" before exercising the appeal.The fourth is to specifically discuss the boundaries of courts intervene in such disputes,and put forward the specific institutional framework.